The Mother of All Analogs (Update)

A few months ago we posted these two charts comparing the S&P’s run from Aug ’66 – Jan ’80 and Aug ’98 – Jan ’13. The correlation was eerily similar as both depicted relatively steep climbs and drops over roughly the same period of time…give or take a year.

Flash forward to today and the all time highs we’re seeing on a daily basis. Here’s the updated charts (log scale):

(click to zoom)

S&P ~ 15 years

The chart above shows that from 1973 to late 1980, the S&P climbed about 17% from peak to peak, and before that declined trough to trough about 14% between 1970 and 1975.

…

The chart below shows that from 2007 to date, the S&P has only climbed 4.5% from peak to peak. The reason I say “only” is because it feels like this market wants to keep running. I haven’t sensed any euphoria from the unwashed masses. Mom and pop don’t care about this market…yet.

S&P ~ 15 years

Who knows, maybe it will take a 15% rise from the 2007 highs to make believers out of everyone and their crazy uncle. If that happens we’re looking at S&P 1800, probably in the next year or so.

Of course all this may just be a figment of my imagination, but if the S&P were to hit 1800 by next year I’m going to straight cash! j/k But on a side note, after the market peak of 1980, the S&P declined about 25% through mid 1982… Whoops!

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Daniel Miller and Jason Robinson are self taught investors based in Daphne, Alabama, and are the co-founders of the WallStreetBean. Neither one of them are professional investors - just two regular guys who want to share their investing ideas and thoughts with others. More

This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice.This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities.